Recently, data released by the Institute of Geography and Statistics (IBGE), which is affiliated to the Brazilian Ministry of Economy, showed that Brazil's inflation rate in March this year increased by 1.62% month-on-month, reaching the highest level in 18 years and the largest single month since 1994. gain.
And this has been Brazil's seven consecutive months of maintaining double-digit inflation, which is more than twice the ceiling of Brazil's official inflation target of 5% this year. The biggest price increases were in transportation and food and beverages, with increases of 3.02% and 2.42%, respectively.
Subsequently, the Central Bank of Brazil raised interest rates by 100 basis points, raising the benchmark interest rate to 11.75%. This is the ninth time the Central Bank of Brazil has raised interest rates since March 2021, and the rate hike measures are extremely crazy.
In the context of the great inflation, the real wages of Brazil's central bank employees continued to decline. As a result, 1,300 employees of Brazil's central bank have gone on strike for up to 20 days as demands for a 26% pay rise could not be met. It is worth mentioning that, at this critical moment, Brazil's central bank governor Campos Neto was on vacation in Miami, the United States.
The strike has nearly paralyzed the country's government's economic system, with the release of a number of customs, budget and key economic data delayed indefinitely. Analysts in the country lamented that the current market transactions are becoming more and more confused.
According to Brazil's National Consumer Price Index (IPCA), the inflation rate in Brazil has accumulated to 11.3% in the past 12 months. The government's promised 5% salary increase cannot make up for the loss of inflation. Central bank employees are generally dissatisfied with this.
In fact, the strike that broke out in Brazil's financial sector has been backlogged for a long time. Brazil's central bank hasn't raised wages for the past three years, and some staff haven't even had a pay rise in the past five years. In the context of continued soaring inflation, the Brazilian government has yet to come up with a salary increase plan that will satisfy the employees of the country's central bank.
In response, Brazilian President Bolsonaro announced that from July this year, the wages of employees of the Central Bank of Brazil will be increased by 5%, which will increase public fiscal expenditure by 6.3 billion reais (about 1.3 billion US dollars) in 2022.
But the 5% increase did not satisfy the employees of Brazil's central bank. Fabio Fayad, president of the National Union of Central Bank Employees, announced that if the government does not propose better than 5% salary increases by May 2, all Brazilian central bank civil servants will resume strikes "automatically" from the next day.
